What Snap’s IPO Could Learn From Tolkien

The NewCo Daily: Today’s Top Stories

You may remember that moment late in The Fellowship of the Ring when hobbit-hero Frodo Baggins arrives at a safe haven in Rivendell, only to realize that his quest has just begun — and he’s got two more books’ (or movies’) worth of perils to surmount. IPOs are kind of like that.

Companies, executives, and investors often feel that going public is the end of a road, and of course it is. But it’s also the on-ramp to a much longer labor for everyone involved. You’ve sold the world on a vision? Great. Now you’d better deliver.

That’s why the reactions to this week’s big initial public offering by Snap, the parent company to Snapchat, is so divided. For every enthusiast who sees Snap as a generation-defining social network on the cusp of exponential growth — in other words, the next Facebook — there is another skeptic who views the company as an overhyped tech darling that loses money today, may never turn a profit, and will never be able to throw off enough cash to warrant its humongous market valuation (at the end of yesterday’s trading, about $34 billion).

The Snap bears (best summarized by James Stewart in The New York Times) see this IPO as more like Twitter’s than Facebook’s, and expect a long, slow deflation of expectations. Rob Moore (NewCo Shift) thinks it’s even worse, comparing Snapchat not to Twitter but to Yik Yak and Vine. If you know how many kids live every minute of their lives on the service, it’s reasonable to think that there must be a great business in there somewhere. But where, exactly? And how big? Check back in a year and we’ll see how those Snap glasses look on investors’ portfolios.

Yet Another Worst Practice From Uber

As if gender discrimination charges, intellectual-property theft lawsuits, and the CEO arguing with a driver weren’t enough bad news for Uber, today The New York Times’ Mike Isaac revealed details of a longstanding secret Uber program to shield the ride-hailing service from the scrutiny of local governments.

The program, dubbed Greyball, essentially identified city and law enforcement officials and made sure they couldn’t get Uber rides, so the authorities would be unable to document cases of Uber breaking the rules. The company describes this as keeping out Uber users who are violating its terms of service — a tool that has legitimate uses, like protecting drivers from known dangerous users. But turned against government oversight, it looks highly deceptive, possibly illegal, and totally indefensible.

Uber has long pursued a strategy of moving into new markets fast, before local authorities have a chance to regulate its service, and then fighting them when they try to enforce existing or new laws. But the Greyball story suggests that this mindset isn’t just about speed and disruption; Uber seems to be addicted to arrogant misbehavior. That can’t end well.

Amazon’s Newest Delivery Area: The Moon

The Trump administration says it’s more interested in the moon than in Mars right now — possibly because the Obama administration said exactly the opposite. So there’s a flurry of new plans for lunar travel in the air, including Elon Musk’s much-heralded announcement that his SpaceX would fly two commercial passengers around the moon next year.

Amazon’s Jeff Bezos has just unveiled a different kind of idea for his own space startup, Blue Origin: A service, nicknamed Blue Moon, to make regular deliveries to a lunar crater hat could be the site of a human colony (The Washington Post). Bezos says that in partnership with NASA his firm could make the trips happen by 2020. The crater Blue Origin is eyeing, near the moon’s South Pole, offers constant sunlight for power, and there’s even some ice (for hydrogen rocket fuel).

“Blue Moon is all about cost-effective delivery of mass to the surface of the Moon,” Bezos says. After all, if people are going to spend time on the moon, they’re going to need stuff. As long as they don’t expect free two-day shipping.

How Free Trade Keeps the Peace

The thing about free trade that angry Trump populists miss is that it’s not only about jobs and growth: it’s about peace and lives. The Victorian-era liberals who elevated free-trade doctrine to its present-day orthodoxy believed that the bonds of open trade would inhibit the likelihood of devastating wars. And history has proven them (mostly) right, Dan Kopf observes in Quartz.

In this analysis, whenever you see an uptick of nationalism and religious militarism and a downturn in support for free trade — like, um, now — it’s time to sound the war alarm. Since the Second World War’s denouement ushered in a new era of global trade, the world has suffered through many terrible regional conflicts and Cold War-style competitions, but it hasn’t spiraled back into another worldwide melee. By demanding that nations sit down and talk about currencies, tariffs, and regulations, free-trade policies make diplomacy the heart of the international system and banish war to the fringes. How far do we really want to test the inverse scenario?